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necessary to qualify the statement about personal interest with
“generally”. The Blue Book identifies another possible category
besides interest on a deficiency arising in the case of a sole
proprietorship, which contributes to the conclusion that the
controlling legislative history’s meaning is unclear.
(5) Conclusions From the Statute and the History of the
Legislation
The relevant statutory language is not the term “personal
interest”, but the definitional term in subparagraph (A) of
section 163(h)(2), in the context of the remaining elements of
the definition. That definitional term differs from the
statutory language construed in the three pre-TRA 1986 opinions
relied on in Redlark, and so the meaning of that definitional
term presumably is different from the meanings of the statutory
language construed in those three opinions.
The relevant statutory language does not provide a clear
answer to the dispute before us in the instant case.
The history of the legislation clearly shows an evolution in
the Congress’s thinking during the legislative process; it
provides some support for the validity of the Treasury
regulations, but that support is rebuttable. Apart from the
analysis in Redlark, that history does not provide support for
the conclusion that the Treasury regulations are invalid.
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